Tax Expert: All Journalists Proved About Donald Trump's 1995 Return Was Their Own Ignorance

To state the obvious, political reporters don’t know a damned thing about taxes. I know this–believe me (to channel my inner Donald). Part of what I do for a living is prepare people’s taxes in the Washington, DC area. As an Enrolled Agent, I run into all sorts of clients. The most political (that is, horse race/hot take) clients compete with performing artists for the least amount of knowledge when it comes to taxes. I’ve even had some of them forget to bring their W-2s to a tax session.

That ignorance was on display in vivid colors over the weekend. We were told that this tricky NOL was some sort of “loophole” that only super-rich bad guys like Donald Trump got to use. We were told that this relieved him of having to pay taxes for 18 years, a laughably arbitrary, made up number that is the tautological output of simple arithmetic and wild assumptions.

In fact, a net operating loss is very common in businesses. As Alan Cole of the Tax Foundation pointed out this morning, about 1 million taxpayers had an NOL in 1995. It results from business deductions exceeding business income in a particular year. Under tax rules, this loss can be carried back up to two years, and carried forward up to twenty years. If this is a “loophole,” what are these political reporters suggesting? That a business loss should simply be eaten by the taxpayer? That Uncle Sam should be a full partner in your profits but not in your losses? How is that fair?